Proprietorship Registration

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Sole proprietorship is one of the oldest and easiest Business Structure to start in India. A proprietorship is a type of business that is owned, managed, and controlled by one person – who is the proprietor. As the proprietorship and proprietor are one and the same, it is very easy to start and there are very minimal compliance requirements.

As the proprietor and the business are one and the same, a proprietorship cannot have other partners or shareholders. Further, there is no limited liability protection for the proprietor from the business activities conducted in the sole proprietorship. Hence, this type of business entity is best suited for every small businesses with no more than 5 employees.

IndiaFilings can assist you to register proprietorship firm online, a simple and efficient business structure that is ideal for solo entrepreneurs. With our expert guidance and streamlined process, you can start your proprietorship firm registration online quickly and hassle-free. Start your Sole Proprietorship registration online with us and unlock the potential of your business ideas.

Sole Proprietorship Registration in India

Sole Proprietorship registration in India follows a unique approach, as there isn’t a dedicated government-established registration process for this business structure. Instead, a proprietorship firm registration online gains recognition through tax registrations mandated by relevant laws and regulations. One pivotal tax registration is the GST (Goods and Services Tax) Registration, which must be secured under the proprietor’s name to formalize the business’s proprietorship status. This sole proprietorship registration online signifies that the proprietor is conducting business within the framework of a proprietorship. IndiaFilings helps you to register proprietorship firm online easily and effortlessly.

Essential Licenses and Registrations for Proprietorships

To register proprietorship firm online and run in India, you need important licenses and registrations, including:

Get a Permanent Account Number (PAN) and an Aadhaar card for your business identification.
Register under UDYAM, which recognizes your business as a Micro, Small, or Medium Enterprise (MSME) and offers government benefits.
If your business exceeds specific thresholds, you must register for Goods and Services Tax (GST) to collect and pay GST.
Open a separate bank account for your business to manage finances smoothly.
Depending on your business location, register under your state’s Shops and Establishment Act to follow local labor regulations.

Advantages of Register a Sole Proprietorship Online

Easy registration: Sole proprietorship registration does not have any formal incorporation or dissolution process – as its the same as the Proprietor. However, to operate a business, the proprietor may have to obtain certain registrations and licenses to be compliant with the laws and regulations of India.

Lower compliance: As most proprietorship company registration are only registered with government departments like Income Tax & GST, the compliance burden will be lower. On the other hand, entities like LLP or Company are registered with the Ministry of Corporate Affairs and have to file various statutory returns and be audited by a Chartered Accountant each year.

Simplicity: As there are no partners, shareholders, or directors, the proprietor can easily operate this business with minimal documents and consent requirements. Hence, this type of business structure is best suited for very small businesses.

Business decision: In a proprietorship, the business owner takes all business decisions. There is no consent or approval required from any other person. Hence, a proprietor can normally take quick decisions regarding his business affairs.

Complete control: As sole proprietorship is owned only by the proprietor. He/she has complete control over the assets, revenue, expenses and all business operations.

Disadvantages of Register a Sole Proprietorship Online

Below, we have given the several benefits one can obtain by setting up a proprietorship company registration.

Funding: This type of business structure relies solely on one persons savings, borrowings and credit history. As there are no other persons are involved in this type of business structure, raising funds from banks will be very hard. Raising equity funds will not be possible – as this type of business entity does not allow for profit sharing or shareholding.

Personal liability: If a proprietor is unable to pay business loans or taxes, in a proprietorship – the personal assets of the business owner can be attached or encumbered. Hence, in this type of business structure – the proprietor will be held personally liable until all the liabilities are extinguished.

Business continuity: In case of death or disability of the business owner, the sole proprietorship will be automatically dissolved. Hence, there is will be no business continuity.

Growth: A proprietorship has various restrictions in terms of fundraising, liability and business continuity. Hence, only very small businesses that are in the unorganized sector operate as proprietorship.

Unincorporated business: Sole proprietorship are unincorporated businesses. Hence, there is no centralized database available to see if a sole proprietorship registration online is active or inactive. Thus, sole proprietorship entities are mostly classified as unorganized business.

Register Proprietorship Firm Online through IndiaFilings

You can easily complete proprietorship firm registration online through IndiaFilings. For a sole proprietorship registration, only the PAN & Aadhaar card of the business owner is required. We can help you obtain the following registrations in less than 15 days:

GST Registration
Zero-Balance Business Current Account with LEDGERS Accounting Software

Once, you have registered for the proprietorship firm registration online on IndiaFilings, please follow the steps below and upload the following documents by logging into LEDGERS.

Register Proprietorship Firm Online through IndiaFilings

GST Registration
Zero-Balance Business Current Account with LEDGERS Accounting Software

Once, you have registered for the proprietorship firm registration online on IndiaFilings, please follow the steps below and upload the following documents by logging into LEDGERS.

Step 1: Login to LEDGERS using the email address for payment.
Step 2: Go to Services Tab & Select Proprietorship Engagement
Step 3: Upload your PAN & Aadhar Card Copy
Step 4: An IndiaFilings Registration Expert will file the registration application with GST Department and Bank for Current Account.
Step 5: Access to LEDGERS Accounting Software is for GST invoicing, GST filing and other services.

PAN Card for Proprietorship Firm Registration Online

A proprietorship is not a separate business entity. Hence, there is no procedure to obtain proprietorship PAN card. The PAN card of the business owner is used for the proprietorship.

Obtaining GST Registration for Proprietorship

GST registration for a proprietorship will be obtained by IndiaFilings as a part of the service of register proprietorship firm online. The following documents are required for GST registration:

Permanent Account Number (PAN) of Proprietor
Digital Signature Certificate of the Authorized Signatory
Consent by Proprietor for obtaining GST Registration
Photograph of Proprietor and Authorized Signatory
Bank Account Details: A scanned copy of a cancelled cheque with the business entity’s name, bank account number, MICR, IFSC, and branch information.
Declaration / Authorization to Authorized Signatory
For commercial purposes, the rent / lease agreement should be in the name of the proprietor.
Additional documents such as Aadhaar Card, Driving Licence, Passport, or Voter ID in the name of the Owner with the complete address of the premises should also be provided if the address on the ownership document (Property Tax Receipt or Municipal Khata copy or copy of Electricity Bill) is incomplete.